Contract Review Agent

Analyze contracts quickly: surface risky clauses, extract obligations, track renewals, and generate summaries — without replacing attorney review for high-stakes agreements.

When to Use

• Reviewing vendor/supplier agreements before signing
• Auditing SaaS subscription terms (auto-renewal traps, data ownership, liability caps)
• Extracting obligations and deadlines from active contracts
• Building a contract renewal calendar
• Generating executive summaries for leadership review
• Flagging red-flag clauses (indemnification, limitation of liability, IP assignment)
• Comparing two contract versions for material changes

When NOT to Use

• Litigation strategy or legal advice — always involve licensed counsel
• M&A agreements, securities contracts, complex IP licensing — specialized attorney required
• Drafting new contracts from scratch — use a legal drafting tool or attorney
• Regulatory filings that require attorney signature — out of scope
• Final approval gate — this tool surfaces issues; humans make binding decisions

Key Capabilities

1. Clause Risk Analysis

Identify and score risky clauses across five risk categories:

Risk scores: 🔴 High / 🟡 Medium / 🟢 Low

2. Obligation Extraction

Pull structured obligation data from contract text:

OBLIGATIONS EXTRACTED
─────────────────────
Party: [Vendor/Client/Both]
Obligation: [Description]
Deadline/Frequency: [Date or recurring schedule]
Consequence of breach: [Penalty, termination right, etc.]
Owner (internal): [Department or role to assign]

3. Renewal & Deadline Calendar

Build a renewal tracker from extracted dates:

CONTRACT CALENDAR
─────────────────
Contract: [Name / Counterparty]
Effective Date: [Date]
Initial Term: [Duration]
Auto-Renewal: [Yes/No] — [X days notice to cancel]
⚠️  Cancel-by Date: [Date] — [X days from today]
Expiration: [Date]
Next Review: [Recommended review date]

Flag contracts where the cancel-by date is within 60 days.

4. Executive Summary Template

CONTRACT SUMMARY
────────────────
Agreement: [Type] — [Counterparty]
Date: [Effective] | Term: [Duration]
Value: [Contract value / annual spend]

KEY TERMS
• Payment: [Net 30/60, milestones, etc.]
• Liability cap: [Amount or formula]
• Termination: [Notice period, conditions]
• Auto-renewal: [Yes/No + notice window]

TOP RISKS (Flagged)
🔴 [Risk 1 — clause reference]
🟡 [Risk 2 — clause reference]

RECOMMENDED ACTIONS
1. [Action + owner + deadline]
2. [Action + owner + deadline]

ATTORNEY REVIEW NEEDED: [Yes/No — reason]

5. Contract Comparison (Redline Review)

When comparing two versions:

1. Identify added/removed/modified clauses
2. Flag material changes (financial impact, rights, obligations)
3. Summarize net change in risk profile
4. Highlight any clauses that were previously accepted and are now altered

Workflow: Review a Contract

Step 1 — Ingest

# PDF contract
pdf contract.pdf "Extract all clauses, obligations, dates, and parties"

# Or paste text directly into prompt

Step 2 — Structured Extraction Prompt

Review this contract and provide:

1. PARTIES — Full legal names, roles (buyer/seller/licensor/etc.)
2. TERM — Effective date, duration, renewal terms, notice windows
3. FINANCIAL TERMS — Payment amounts, schedules, escalation clauses, penalties
4. OBLIGATIONS — All commitments by each party with deadlines
5. RISK FLAGS — Rank each flagged clause 🔴/🟡/🟢 with section reference
6. TERMINATION — How can each party exit? What are the conditions?
7. GOVERNING LAW — Jurisdiction, dispute resolution method
8. RECOMMENDED ACTIONS — What needs attorney review? What can be negotiated?

Format as structured sections. Be specific — include section numbers.

Step 3 — Output Artifacts

• Risk Register: Spreadsheet row per risk (clause, category, severity, owner, action)
• Obligation Log: Task list with owners and due dates
• Renewal Calendar: Dates loaded into calendar system
• Executive Summary: 1-page PDF for leadership sign-off

Common Red Flags by Contract Type

SaaS/Software Agreements

• Auto-renewal with short cancel window (\x3C 30 days notice)
• Data ownership vague or assigned to vendor
• Unlimited liability for IP infringement
• Unilateral price increase rights
• Broad "acceptable use" termination triggers

Vendor/Supplier Agreements

• Price escalation tied to CPI or vendor discretion
• Indemnification that covers third-party claims broadly
• Exclusivity clauses limiting your options
• IP developed jointly assigned fully to vendor
• Termination fees that exceed remaining contract value

Client Engagement Letters (Accounting/Finance)

• Scope of services defined too broadly (scope creep risk)
• Liability cap below engagement fee
• No limitation on client reliance on deliverables
• Governing law outside your state
• No clear change-order process

NDAs

• One-sided (only you are bound)
• Perpetual term with no sunset
• Overly broad definition of "confidential information"
• No carve-outs for publicly available information
• Residuals clause allowing retained memory of disclosed info

Contract Inventory Maintenance

Keep a running inventory. Recommended fields:

| Field | Description |
|---|---|
| contract_id | Unique internal ID |
| counterparty | Vendor/client legal name |
| contract_type | NDA / MSA / SOW / SaaS / Lease / etc. |
| effective_date | When it started |
| expiration_date | Hard end date |
| auto_renewal | Yes/No |
| cancel_by_date | Calculated: expiration - notice window |
| annual_value | Dollar amount |
| risk_score | 1-5 overall |
| owner | Internal owner (name/department) |
| location | File path or doc URL |
| last_reviewed | Date of last review |
| notes | Key flags or negotiation history |

Integration with PrecisionLedger Workflows

• AP/AR: Cross-reference payment terms in contracts against actual invoice terms — flag discrepancies
• Compliance Monitor: Load contract obligations into compliance calendar alongside regulatory deadlines
• Financial Reporting: Flag contracts with contingent liabilities (indemnification, guarantees) for disclosure
• Client Onboarding: Use engagement letter checklist during new client setup
• Budget Forecasting: Extract contract escalation clauses to model future spend increases

Escalation Rules

Always escalate to licensed attorney when:

• Contract value > $50,000
• Indemnification is unlimited or uncapped
• IP assignment affects core business assets
• Personal liability clauses (executive sign-off required)
• Governing law is outside your operating jurisdiction
• Any clause that waives statutory rights
• M&A, securities, or financing-related terms appear

Example Run

Input: SaaS vendor agreement PDF

Output:

RISK SUMMARY — Acme SaaS Agreement (2026-03-15)
────────────────────────────────────────────────
🔴 HIGH: Auto-renewal — 7 days cancel notice only (§12.3)
   → Cancel-by date: 2026-03-22. ACTION: Decide NOW.

🔴 HIGH: Data ownership — "all data processed becomes vendor property" (§8.1)
   → Unacceptable. Negotiate or reject.

🟡 MEDIUM: Liability cap — capped at 1 month fees (§15.2)
   → Low coverage for a $24k/year contract. Push for 12 months.

🟡 MEDIUM: Price escalation — up to 15% annual increase, no notice required (§5.4)
   → Budget risk. Request 30-day notice + cap at CPI.

🟢 LOW: Governing law — Texas (§20.1)
   → Acceptable, matches our jurisdiction.

OBLIGATIONS (Your side):
• Pay net-30 from invoice date (§5.1) — Finance/AP
• Provide access credentials within 5 business days of signing (§3.2) — IT
• Report data breaches within 24 hours (§9.4) — Security/Compliance

ATTORNEY REVIEW: YES — §8.1 data ownership clause is non-standard and high-risk.